EUR/USD flirting with lows, around mid-1.2300s ahead of US data

Haresh Menghani FXStreet

• EUR continues to be weighed down by Draghi’s dovish tone.
• A modest USD recovery adds to the downward pressure.
• Follow-through selling might open room for additional weakness.

The EUR/USD pair extended its steady decline from an intraday high level of 1.2384 and has now dropped to fresh session lows.

The pair extended its overnight retracement slide from multi-day tops, triggered by the ECB President Mario Draghi's dovish tone, and drifted into negative territory for the second consecutive session.

This coupled with a modest US Dollar rebound, despite lingering growing global trade war fears, kept exerting some additional downward pressure and dragged the pair to mid-1.2300s.

The pair, however, seems to be finding some support near a short-term ascending trend-line, extending from monthly lows. Hence, it would prudent to wait for a decisive break below the mentioned support before positioning for any additional near-term depreciating move.

On the economic data front, the release of regional manufacturing indices and the usual weekly jobless claims from the US would now be looked upon for some fresh trading impetus during the early NA session.

Technical levels to watch

A convincing break below mid-1.2300s is likely to accelerate the fall towards the 1.2300 handle en-route 1.2275 horizontal support. On the upside, the 1.2400 area might continue to act as an immediate hurdle, which if cleared decisively might trigger a short-covering bounce and assist the pair to aim back towards reclaiming the key 1.25 psychological mark.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

GBP/USD bounces off four-day lows, still below 1.3500

GBP/USD sticks to the bearish tone on Thursday, coming down to the 1.3480 region in the latter part of the NA session. In the meantime, Cable’s weakness comes as investors continue to assess mixed UK data, poor US results, and the persistent uncertainty surrounding the US-Iran conflict.

EUR/USD looks apathetic around 1.1530

EUR/USD reverses Wednesday’s downtick and trades with modest gains in the 1.1530 region following the end of the NA session on Thursday. The pair’s tepid advance comes on the back of the absence of clear direction in the US Dollar despite tensions from the Middle East appear far from alleviated. Later on Friday, investors are expected to monitor the the releases of another revision of GDP figures in the Euroland, US Retail Sales and the preliminary U-Mich gauge.

Gold remains on the defensive below $4,350; downside seems cushioned

Gold trades below $4,350 during the Asian session on Friday and looks to extend the previous day's pullback from the highest level since June 5 as the US-Iran standoff continues to underpin the US Dollar's reserve-currency status. However, reduced bets for an immediate Fed rate hike, amid signs of cooling US inflation, should act as a tailwind for the non-yielding bullion and help limit deeper losses.

Dogecoin reclaims $0.07 support as whales step in

Dogecoin (DOGE) edges above the daily open, trading above $0.070 as of Thursday. While this uptick offers a positive signal, DOGE continues to trade within a broader bearish context, down approximately 12% from its July peak of $0.079. Still, should the $0.070 support level hold, the mild recovery could gather pace, targeting resistance at $0.080 and potentially the key $0.100 threshold.

Why credit markets aren’t pricing $570B of AI debt

Forecasts put global artificial intelligence related debt issuance near $570 billion this year, with roughly $236 billion of it priced by the end of May at four times the prior year's pace. Data centre securitisation alone has gone from about $4 billion a year through 2022 to roughly $10 billion in each of 2023 and 2024, and then $27 billion in 2025.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.